Question
In: Finance
Future value (with changing interest rates). Jose has $3,000 to invest for a 6-year period. He...
Future value (with changing interest rates). Jose has $3,000 to invest for a 6-year period. He is looking at four different investment choices. What will be the value of his investment at the end of 6 years for each of the following potential investments?
a. Bank CD at 3%.
b. Bond fund at 9%.
c. Mutual stock fund at 14%.
d. New venture stock at 23%.
Solutions
Expert Solution
Based on the given data and various investment options, pls find below the answers:
jeff jeffy answered 2 years agoRelated Solutions
Future value (with changing interest rates). Jose has $8,000 to invest for a 2-year period. He...
Future value (with changing interest rates). Jose has $8,000
to invest for a 2-year period. He is looking at four different
investment choices.
What will be the value of his investment at the end of 2 years
for each of the following potential investments?
a. Bank CD at 4.5%.
b. Bond fund at 7.5%.
c. Mutual stock fund at 12%.
d. New venture stock at 25%.
a. What will be the value of Jose's bank CD investment that
offers an...
Calculate the net future value at year 2 for the following cashflows and interest rates...
Calculate the net future value at year 2 for the following cash
flows and interest rates compounded quarterly (rounded $ to two
places after the decimal). The year 0 cash flow is $399, the year 1
cash flow is $204, and the year 2 cash flow is $-155. The interest
rate for the first period (year 0 to 1) is 3% and the interest rate
for the second period (year 1 to 2) is 4.7%.
1. If the future value of an ordinary, 7-year annuity is $10,000 and interest rates are...
1. If the future value of an ordinary, 7-year annuity is $10,000
and interest rates are 4%, what is the future value of the same
annuity due? A. $9,615.39 B. $10,010.00 C. $10,710.00 D.
$10,400.00
2.The returns on the common stock of ACME closely follow the
economy. In a booming economy, the stock is expected to return 23%
in comparison to 14% in a normal economy and a -18% in a recession.
The probability of a recession is 18% while...
Calculate the future value of$3,000 in a.Four years at an interest rate of 5 % per...
Calculate the future value of$3,000 in
a.Four years at an interest rate of 5 % per year.
b.Eight years at an interest rate of 5% per year.
c. Four years at an interest rate of 10% per year.
d. Why is the amount of interest earned in part (a) less than
half the amount of interest earned in part
(b)?
What is the present value of a five-period annuity of $3,000 if the interest rate per...
What is the present value of a five-period annuity of $3,000 if
the interest rate per period is 12% and the first payment is made
today?
Three thousand dollars is deposited into an account paying 10%
annually to provide three annual withdrawals of $1,206.34 beginning
in one year. How much remains in the account after the second
payment has been withdrawn?
You will be receiving cash flows of: $1,000 today, $2,000 at end
of year 1, $4,000 at end of...
If the present value of an ordinary, eight-year annuity is $7,800 and interest rates are 6...
If the present value of an ordinary, eight-year annuity is
$7,800 and interest rates are 6 percent, what is the present value
of the same annuity due? (Round your answer to two decimal
places.)
Payment Years Interest Rate (Annual) Future Value (Payment made on last day of period) Future Value...
Payment
Years
Interest Rate (Annual)
Future Value (Payment made on last day
of period)
Future Value (Payment made on first day
of period)
$283
15
15
%
6,155
10
12
76,084
7
14
168,932
11
5
Compute the future values of the following annuities first
assuming that payments are made on the last day of the period and
then assuming payments are made on the first day of the period:
(Do not round intermediate calculations. Round your answers
to 2...
There are important relationships between Interest Rates and Time as it relates to Future Value: For...
There are important relationships between Interest Rates and
Time as it relates to Future Value:
For a given Interest Rate, what is the impact on Future Value
if the Time Period is longer and for a given Time Period, what is
the impact on Future Value if the Interest Rate is higher?
For a given time period and for the same future value amount, the higher the interest...
For a given time period and for the same future value amount,
the higher the interest rate the lower the present value. T or
F
You are trying to save up to buy a mountain bike worth $5,900.
You can invest $200 a month in your bank that pays 4.4% interest on
its accounts. How many years will it be before you have enough to
purchase the mountain bike?
Tim has his heart set on buying a million-dollar house when...
You just received a bonus of $3,000. a. Calculate the future value of $ 3,000, given...
You just received a bonus of $3,000. a. Calculate the future
value of $ 3,000, given that it will be held in the bank for 8
years and earn an annual interest rate of 3 percent. b. Recalculate
part (a ) using a compounding period that is (1) semiannual and (2)
bimonthly. c. Recalculate parts (a ) and (b ) using an annual
interest rate of 6 percent. d. Recalculate part (a ) using a time
horizon of 16 years...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Calculate the ideal age of a spouse. Enter either m or f from the keyboard in...
- Due to a recession, expected inflation this year is only 4.75%. However, the inflation rate in...
- What are the benefits of doing a pilot program before a full scale rollout of a...
- It is a calm summer day in southeast Iowa at the Ottumwa air traffic control radar...
- 1. Write a detailed article on Evolution of attacks on the internet & web [your article...
- Analyze the role of the contingency plan coordinator (CPC) in the scope of preparing a BIA....
- Amazing Manufacturing, Inc., has been considering the purchase of a new manufacturing facility for $500,000. The...
ADVERTISEMENT